(Yicai Global) Oct. 16 -- Venture capitalists have poured millions into blockchain technologies, but there are now too many public blockchains and too few practical applications, according to a Chinese scholar.

"There are about 100 public blockchains in the market [China], even more if you consider ones that are still under development -- but there are not many applications" Liu Xiaolei, dean of the finance department at Peking University's Guanghua School of Management, told Yicai Global.

Public blockchains are frameworks for developers to build applications around.

There are currently 561 projects using such frameworks in China, bust most of their corresponding tokens, or virtual currencies, can only be used for transactions and have no other practical use, according to a research report from cryptocurrency exchange Huobi.

"It is still unclear which one, or which ones, will still be around at the end," Liu added. "The public blockchain now is like the internet in the 1990s, it's quite vague."

Yuan Yuming, chief executive of Huobi China, agreed. "What we see now is the mist. The future has not yet been decided and it's too early for a decision to be made."

Not Yet Mature

One of the reasons there are so few applications is because the technology is still not matured, but could be much riper by 2020. Ethereum, which has the most applications, is only four years old and its network is often congested.

Another issue is its low user penetration rate. There are only tens of millions of users worldwide -- about the same as the internet in the 1990s -- and certain applications are impractical on such a small scale.

"Likewise, Meituan [world's largest on-demand services provider] and Didi Chuxing [world's largest ride-hailing provider] would not have been successful in the '90s," Yuan said.

The advantage American projects have is in their technologies, while China's strength is in exploring usage scenarios, he added. "All the mainstream technological blockchain innovations are in the United States, which is a great step ahead of China. But the application market is able to create large companies and the domestic usage scenarios are quite abundant in variety, despite the fact that China falls behind technologically."

There are many areas where blockchains can be strengthened, such as in commodity trading, corporate affairs and intellectual property, Liu said, adding that decentralization via blockchain can make improvements.

In hospitals, patients' medical records cannot be shared between clinics, he added, saying hospitals are unwilling to share data with unaffiliated institutes. But by decentralizing this data, people will be able to access information without actually owning it, he said. 

Editor: James Boynton